Retailers Often Underutilize Customer Data, According to A.T. Kearney Study
20 May 2013 (Chicago)—Today A.T. Kearney released the 2013 Achieving Excellence in Retail Operations (AERO) Study. The study found that there are many underutilized sources of customer data and retailers should increase their investment in the technology and skills to take advantage of these data sources. For example, less than half of retailers collect social network data from third-party domains, and just eight percent say it is “very important” in generating insights. See the full AERO report.
One of the key findings of the study was that leading retailers are much better at collecting data, measuring activities, acting on their insights, and measuring again to see the results. A.T. Kearney refers to this principal as measure, analyze, and act.
Another insight from the study was that even with the proliferation of technology and vast quantities of store and customer data, retailers also need to focus on the core principles of retailing—employees, customers, and the interactions among them. The study found that retailers that most actively engaged their employees and customers were the most successful.
Joel Alden, A.T. Kearney partner and co-author of the study, commented, “Leading retailers encourage measurement of the right data, invest in the skills to gain insights from that data, and use those insights effectively to frame future actions.”
The study also focused on how retailers were managing the multichannel environment. In this new environment, customers will often return products to a store that they ordered online, or ask a store employee to order an out of stock item through another channel. When employees are not measured on the success of non-store channels, they have little incentive to encourage the growth of those channels.
Another store operations issue that the AERO study analyzed was the importance of field managers. The study findings show that across the board—at the district and regional level and above—managers are overseeing more stores than in the 2010 study. Retail field managers are spending too much time on administration and not enough time in the field.
The AERO study also addressed the importance of front-line staff. These employees interact with customers all day long, gaining valuable insights into customer needs, but few retailers take full advantage of these insights. Adam Pressman, A.T. Kearney principal and co-author of the study, commented, “The problem today is a lack of formal requirements or processes to gather these employee insights. Leading retailers create formal pipelines that capture and use these insights.”
Dean Hillier, A.T. Kearney partner and study co-author, commented, “With all of the moving parts, retail leaders dedicate resources to effectively driving and managing change. This includes focused and measured pilot efforts, tailoring communications and communication channels based on messages and employee groups, and focusing on continuous improvement, not just one-and-done mandates.”
About the Study
A.T. Kearney’s Achieving Excellence in Retail Operations (AERO) study provides insights into how retailers around the globe can improve their operations. With more than 100 questions, the survey probes the strategy, tactics, and execution of retailers in more than 20 countries. It covers multiple sectors, including apparel, health and personal care, mass-market and hypermarket, electronics, food and grocer, and cash and carry. The study is based on A.T. Kearney’s Store Operations Framework. This framework, which was also used to pioneer the 2010 study, breaks operations into categories that set strategic direction, deliver core value, optimize expenses, and drive lasting change.
A.T. Kearney is a global team of forward-thinking, collaborative partners that delivers immediate, meaningful results and long-term transformative advantage to clients. Since 1926, we have been trusted advisors on CEO-agenda issues to the world’s leading organizations across all major industries and sectors. A.T. Kearney’s offices are located in major business centers in 39 countries.